Price makes a new high (or low) while cumulative delta fails to confirm. The move is running on thinning aggression and is vulnerable to reversal.
How to identify it
- Price prints a higher high or lower low
- Cumulative or bar delta makes a weaker reading
- Divergence occurs at a meaningful level
Entry
Enter against the move once price breaks the last minor swing.
Stop loss
Beyond the divergent extreme.
Target
The prior swing or VWAP.
Invalidation
Delta catches up and price extends further.
Does it work for you?
Textbook reliability means little until you know your own numbers. Tag your delta divergence trades in TradeZento and it shows your win rate, average win and loss, and P&L per trade for this pattern, so you know whether to keep it in your playbook.